__economic thinking about sports__

Tour Operators and Mega-events

2009 November 5

by Skip Sauer

The displacement of normal business by events such as the Super Bowl or the Olympics has been a staple issue in academic economists’ analyses of economic impact. These warnings from the ivory tower are typically been derided by local commercial spokesman, as if we are imagining things.

Well, here’s a change of pace. Today comes news from the European Tour Operators Association, who claim that the London Olympics will have a measurable negative impact on their business. From BBC News:

The ETOA report, which said benefits of 2012 Games were “wholly illusory”, looked at tourism figures for the past six Olympics, including Athens in 2004 and Sydney in 2000.

Whilst some of the events saw a peak in demand during the games, all saw a major disruption to their normal tourism market and none showed any obvious signs of tourism growth.

Beijing, the last city to host the Olympics, showed international visitor arrivals plummeted by 30% in the month before the games, compared with the previous year.

In the months after the games, the tourism slump continued with international arrivals down by more than 20%.

Beijing fared considerably worse than the rest of China in 2008, which was not a strong year in general for tourism in the Asia-Pacific region.

Following the Sydney 2000 Olympics, the city’s tourism lost “significant ground” to other Australian and New Zealand cities, it added.

“We have yet to have a games where tourism has not been disrupted, and disrupted in a way that causes real harm,” said ETOA executive director Tom Jenkins.

“Even in the case of Athens, where they carefully restricted new capacity, there were considerable losses before and after the games both in the capital and throughout Greece,” he added.